South African President Jacob Zuma, is leading a major charge by the government and business at the US-Africa summit in Washington this week to win renewal of African Growth and Opportunity Act (AGOA) when it expires next year.
USA being urged to renew a trade benefits program giving duty-free access to billions of dollars of African exports for 15 years. As almost 95 percent of South African exports receive preferential treatment under AGOA.
They strongly believe that by endorsing the extension of AGOA, the U.S. will be promoting African integration, industrialization and infrastructure development. The U.S. administration is keen to renew the program, but duration and possible reforms such as adding new duty-free products, refining eligibility criteria and tweaking regional content limits are yet to be thrashed out.
South African Trade Minister Rob Davies said that African nations had suggested widening the range of products covered to include more textiles and agricultural products, but he did not see the need for a major overhaul as they don’t think the African Growth and Opportunity Act is broken and therefore there is no need to fix it.
AGOA, established in 2000, has already been renewed past its original 2008 expiry date and is now set to run until Sept. 30, 2015. Nearly 40 African countries are eligible to take part.
U.S.-bound exports from sub-Saharan Africa – mainly petroleum - under AGOA and other trade preferences totaled $26.8 billion in 2013.
The summit aims to showcase American interests in the region, home to six of the 10 of the world's fastest-growing economies, through public-private partnerships.
The U.S. administration has already called for Congress to renew the program well ahead of its expiry date, albeit with reforms, and U.S. Trade Representative Michael Froman said last week that he would work with lawmakers on the length of the renewal.
Seamless renewal will send an important signal to purchasers of AGOA products and investors in AGOA industries who are already making decisions about next year, and in some cases, many years in the future.
Renewal of trade benefits program will give duty-free access to billions of dollars of African exports for 15 years.
One of the key instruments that would help to expand trade relations with the US was AGOA. AGOA has transformed the economic landscape for many African countries and South Africa. It is the cornerstone of trade relations between the US and sub-Saharan Africa.
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